Introduction
Global inequality is a systematic difference in wealth and power among countries. The World Bank uses
Explanation of Solution
Answer and explanation
The World Bank makes loans to needy countries, and ranks them to measure global inequality. These rankings are high-income (18% of world population), high-middle, low-middle, and low income (48% of the population live in the last two categories. The rankings are based on gross domestic product (GDP), which adds up the value of all the good a country produces. One problem with this measurement is that it only counts goods made for sale and not subsistence activities, so people who make noncash transactions do not get counted. Another problem is that the GDP is a national average which masks inequality inside each country, and skews upward when a few very high income people increase the average.
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